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Man Group plc (EMG)

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Wednesday 18 January, 2012

Man Group plc

Trading Statement

RNS Number : 7338V
Man Group plc
18 January 2012
 



18 January 2012

 

Trading statement for the nine months to 31 December 2011

 

This document contains estimates for movements in Man's funds under management for the three month period to 31 December 2011 and the company's estimated financial results for the nine month period to 31 December 2011. Final results will be reported on Thursday 1 March 2012.

 

Funds under Management

·     Funds under Management (FUM) at 31 December 2011 of $58.4 billion
(30 September 2011: $64.5 billion; 31 March 2011: $69.1 billion)

·     Sales in the quarter of $3.1 billion and redemptions of $5.6 billion, giving a net outflow of
$2.5 billion

·     Negative investment movement of $1.5 billion, with AHL Diversified plc down 7.7% in the quarter and positive overall performance at GLG

·     FX and other movements of a negative $2.1 billion, driven principally by previously announced guaranteed product degears of $1.6 billion and FX translation effects of $0.3 billion.

 

Financial summary

Nine months to 31 Dec 2011    

Six months to 30 Sept 2011

Year ended 31 March 2011

Net management fee income

$278m

$202m

$476m

Net performance fee income

Net finance (expense)/income

$35m

$(56m)

$39m

$(46m)

$169m

$(46m)

Adjusted profit before tax from continuing operations

$257m

$195m

$599m

Adjusting items

$(67m)

$(41m)

$(275m)

Statutory profit before tax on continuing operations

$190m

$154m

$324m

Diluted statutory EPS on continuing operations

7.4c

6.2c

14.0c

Adjusted diluted EPS on continuing operations

10.5c

8.0c

27.6c

 

Operating efficiency

Man continues to review operating costs and efficiencies. In addition to the previously announced savings, a further $75 million of cost reductions from the 31 December 2011 cost run rate will be implemented by the end of 2012.  $50 million of these additional savings are expected to be realised in 2012 and the balance in 2013.  Further details, including any exceptional costs to deliver these savings, will be contained in the final results statement on 1 March. The previously announced savings of $40 million relating to outsourcing and reduced finance expense are on track for 2012.

 

Financial position and dividend

Man's financial position remains robust, with net tangible assets of $1.6 billion, net cash of $600 million and total available liquidity resources of $3.2 billion. After the repurchase of shares and the payment of the interim dividend, the regulatory capital surplus on 31 December 2011 was around $850 million.

 

As previously announced, the Board expects to propose a final dividend for the three month period to 31 December 2011 of 7.0 cents per share, to give a maintained total dividend, pro-rated for the nine month period, of 16.5 cents per share.

 

Peter Clarke, Chief Executive of Man, said:

 

"Trading conditions have been tough for Man in the second half of 2011. Investment performance varied significantly across styles, with market volatility and reduced market liquidity impacting trading opportunities. Although some of our funds performed strongly and sales held up well, we experienced a net outflow in the last two quarters, albeit with reduced redemptions in the final three months.

 

"Looking ahead, our unique breadth of investment styles positions us well to capture positive performance as markets normalise and trading opportunities re-emerge. With a strong capital base and continued focus on efficiency and performance, we are well placed to benefit when investor demand improves."

 

Conference call

 

A conference call for investors and analysts will be held at 08:00 UK time this morning. 

 

UK Access Number                            +44 20 3140 0723

UK Toll Free* Number                        0800 368 1917

 

Playback

UK Toll Access Number                     +44 (0)20 3140 0698

UK Toll Free* Access Number           0800 368 1890

US Toll Free* Access Number           +1 877 846 3918

Conference Reference                       381618#

 

*If you are calling from a mobile phone your provider may charge you when connected to our toll free number.

 

FUM MOVEMENTS FOR THE QUARTER TO 31 DECEMBER 2011

 

Asset flows

 

Investor appetite remained subdued in the quarter and markets remained volatile. In these challenging conditions, Man recorded sales of $3.1 billion, while the pace of redemptions eased to give $5.6 billion for the quarter compared to $7.3 billion in the quarter to September 2011.   

 

Alternatives

In open ended alternatives, there were net outflows from AHL ($0.8 billion) and GLG ($1.0 billion), with GLG outflows mainly from the emerging markets, UK alpha select and European opportunities styles, partially offset by inflows into the European long/short and macro strategies. Redemptions in the quarter drove a $0.4 billion outflow from guaranteed products.

 

Institutional fund of fund flows were flat over the quarter, with increased funding from managed account mandates being offset by a series of small redemptions across a range of products. Quarterly institutional redemptions paid on 1 January 2012 were approximately $200 million.

 

Long only

Long only funds registered small net outflows across a range of products, to give a total net outflow of $0.3 billion.

 

Investment performance

 

In the quarter to 31 December 2011, investment performance varied significantly across styles, but was $1.5 billion negative in aggregate.

 

AHL Diversified plc was down 7.7% in the quarter, bringing its annual performance to -6.8%. The majority of this negative performance occurred in October, when renewed risk appetite caused sharp reversals across stocks, bonds and currency markets. Equity trading remained challenging in November, as stock markets continued to exhibit large swings during the month.

 

Performance for GLG's range of alternative investment styles was net positive in the quarter with positive returns from European long/short, UK alpha select and convertibles strategies driven primarily by stock selection and negative returns in macro, market neutral and emerging markets as a result of broader macro moves.

 

Performance in Man Multi-Manager was negative $0.6 billion in the quarter, as market reversals impacted performance across a range of styles.

 

FX and other movements

 

FX translation effects reduced FUM by $0.3 billion in the quarter, with the effects of Euro weakness partially offset by strength in the Australian dollar.

 

Other movements were a negative $1.8 billion for the quarter, driven principally by previously announced guaranteed product de-gears of $1.6 billion. A further guaranteed product de-gear of $0.4 billion was executed on 1 January 2012.

 

FINANCIAL SUMMARY

 

Pre-tax profit before adjusting items for the nine months ended 31 December 2011 is estimated to be $257 million.

 

Net management fee income (excluding net finance expense) was $278 million, the reduced run rate compared to the six months to September 2011 being predominantly due to a reduction in high margin FUM in the quarter.

 

Net performance fee income was $35 million compared to $39 million for six months to September 2011. In the final quarter, gross performance fees of $10 million were offset by losses on investments of $4 million and compensation costs (including amortisation of deferred compensation) of $10 million. On 31 December 2011, the weighted average distance from peak for AHL was around 12% and over 50% of performance fee eligible GLG FUM was above or within 5% of high water mark.

 

Net finance expense was $56 million, including a one-off cost of $19 million from the repurchase of debt at a premium to the carrying book value, which resulted in a reduction to annualised interest expense of approximately $20 million. The net interest expense for 2012 is expected to be $42 million.

 

Diluted earnings per share before adjusting items on continuing operations is estimated to be
10.5 cents per share. Adjustments in the three months to December 31 relate to the amortisation of GLG acquisition intangibles and restructuring costs.

 

Statutory EPS (after adjusting items) is estimated to be 7.4 cents per share.

 

Future dividend dates

 

Provisional dates for Man's next two dividend payments are shown below.

 

Final dividend (for the nine months to December 2011)

Ex dividend date

Record date

AGM

Dividend paid

25 April 2012

27 April 2012

1 May 2012

17 May 2012

Six month interim dividend (relating to the 12 months to December 2012)

Ex dividend date

Record date

Dividend paid

August 2012

August 2012

September 2012

 

FUNDS UNDER MANAGEMENT ANALYSIS

 

3 months to 31 December 2011


Guaranteed

$bn

Open ended

Institutional FoF and other

$bn

Total Hedge Funds

$bn

Long only

$bn

Total

$bn

Man

$bn

GLG

$bn

FUM at 30 Sept 2011

12.4

16.6

12.0

12.6

53.6

10.9

64.5

Sales

-

0.5

1.2

0.8

2.5

0.6

3.1

Redemptions

(0.4)

(1.3)

(2.2)

(0.8)

(4.7)

(0.9)

(5.6)

Net inflows/(outflows)

(0.4)

(0.8)

(1.0)

-

(2.2)

(0.3)

(2.5)

Investment movement

(0.6)

(0.9)

0.2

(0.3)

(1.6)

0.1

(1.5)

FX

0.2

(0.1)

(0.2)

(0.2)

(0.3)

-

(0.3)

Other

(1.6)

(0.3)

-

0.1

(1.8)

-

(1.8)

FUM at 31 Dec 2011

10.0

14.5

11.0

12.2

47.7

10.7

58.4

 

9 months to 31 December 2011


Guaranteed

$bn

Open ended

Institutional FoF and other

$bn

Total Hedge Funds

$bn

Long only

$bn

Total

$bn

Man

$bn

GLG

$bn

FUM at 31 March 2011

15.1

13.7

13.6

12.7

55.1

14.0

69.1

Manager Acquisitions
(Ore Hill)

-

-

-

0.3

0.3

-

0.3

Sales

0.6

4.4

6.1

2.8

13.9

2.8

16.7

Redemptions

(1.5)

(2.8)

(6.7)

(2.6)

(13.6)

(4.6)

(18.2)

Net inflows/(outflows)

(0.9)

1.6

(0.6)

0.2

0.3

(1.8)

(1.5)

Investment movement

(0.5)

0.1

(1.3)

(0.8)

(2.5)

(1.5)

(4.0)

FX

(0.3)

(0.5)

(0.6)

(0.4)

(1.8)

0.1

(1.7)

Other

(3.4)

(0.4)

(0.1)

0.2

(3.7)

(0.1)

(3.8)

FUM at 31 Dec 2011

10.0

14.5

11.0

12.2

47.7

10.7

58.4

 

FUM by manager

 

$bn

31 December 2011

30 September 2011

31 March 2011

AHL

21.0

24.4

22.7





GLG Alternatives

15.5

16.5

18.0

- Equity




-     Europe

2.5

2.6

3.3

-     North America

2.3

2.1

2.3

-     UK

0.9

1.1

2.0

-     Other equity alternatives

0.6

0.9

0.7

- Credit and Convertibles




-     Convertibles

1.8

1.8

2.2

-     Market Neutral

0.9

1.0

1.1

-     Ore Hill

0.9

0.6

0.4

-     Pemba

2.5

2.8

2.8

- Emerging markets

2.3

2.8

2.6

- Macro and special situations

0.8

0.8

0.6





Long only

10.7

10.9

14.0

-     Japan

5.6

5.8

6.0

-     Other

5.1

5.1

8.0





Man Multi-Manager

11.2

12.7

14.4

Total

58.4

64.5

69.1

 

Investment performance

 


Total return

Annualised return


3 months

to 31 Dec 2011

9 months to 31 Dec 2011

Cal.

year to 31 Dec 2011

3 years to
31 Dec 2011

5 years to
31 Dec 2011

AHL






Man AHL Diversified plc1

-7.7%

0.1%

-6.8%

-3.8%

7.2%

AHL Alpha plc2

-5.7%

0.7%

-4.4%

-1.5%

6.2%

Man AHL Diversity3

-3.8%

0.2%

-5.1%

n/a

n/a

Man AHL Trend4

-5.3%

-0.5%

-7.4%

n/a

n/a







GLG ALTERNATIVES






Equity






Europe






GLG European Long Short Fund5

2.1%*

3.5%*

7.2%*

11.5%*

6.2%*

GLG European Equity Alternative UCITS Fund6

1.9%

n/a

n/a

n/a

n/a

GLG European Alpha Alternative UCITS Fund7

0.0%

-2.2%

1.5%

n/a

n/a

GLG European Opportunity Fund8

-2.2%*

-15.2%*

-15.3%*

-0.3%*

4.6%*

MLIS GLG European Opportunity UCITS Fund9

-2.3%

-14.6%

-14.5%

n/a

n/a

North America






GLG North American Opportunity Fund10

-2.5%*

-11.1%*

-8.5%*

10.7%*

2.2%*

GLG North American Equity Alternative UCITS fund11

-2.8%

-12.0%

n/a

n/a

n/a

UK






GLG Alpha Select Fund12

1.0%*

-11.4%*

-10.2%*

5.3%*

8.5%*

GLG Alpha Select UCITS Fund13

0.7%

-12.0%

-11.1%

n/a

n/a

Other equity alternatives






GLG Global Opportunity Fund14

-3.3%*

-11.3%*

-10.4%*

5.3%*

0.9%*

Credit and convertibles






Convertibles






GLG Global Convertible Fund15

0.4%

-10.4%

-8.2%

11.9%

1.2%

GLG Global Convertible UCITS Fund16

0.6%

-11.0%

-8.8%

12.0%

0.3%

Market Neutral






GLG Market Neutral Fund17

-1.2%*

-6.5%*

1.0%*

35.6%*

5.6%*

GLG European Distressed Fund18

-6.2%*

-10.3%*

-1.9%*

n/a

n/a

Ore Hill






GLG Ore Hill Fund19

-0.6%

-5.8%

-0.4%

18.7%

0.8%

Emerging markets 






GLG Emerging Markets Fund20

-0.6%*

-18.4%*

-18.0%*

7.6%*

3.5%*

GLG Emerging Markets UCITS Fund21

0.1%

-16.0%

-15.5%

n/a

n/a

Macro and special situations






GLG Atlas Macro Fund22

-4.6%*

4.7%*

-0.5%*

n/a

n/a

GLG Atlas Macro Alternative UCITS Fund23

-6.0%

2.9%

-3.3%

n/a

n/a







GLG LONG ONLY






GLG Japan Core Alpha Equity Fund24

-5.3%

-18.3%

-20.8%

1.4%

-10.0%

GLG Performance Fund25

7.4%

-15.1%

-11.7%

7.6%

-4.4%













 

Investment performance continued


Total return

Annualised return


3 months

to 31 Dec 2011

9 months to 31 Dec 2011

Cal.

year to 31 Dec 2011

3 years to
31 Dec 2011

5 years to
31 Dec 2011

MAN MULTI-MANAGER






Man-IP 22026

-5.1%*

-0.3%*

-7.8%*

-2.0%*

3.8%*

Man Absolute Return Strategies27

-1.9%*

-6.4%*

-6.1%*

3.4%*

0.9%*

Man Dynamic Selection28

-3.1%*

-6.5%*

-6.9%*

2.0%*

2.0%*

GLG Multi-Strategy Fund29

-1.7%*

-6.5%*

-4.4%*

8.7%*

-0.6%*







Indices






World stocks30

7.9%

-8.7%

-5.5%

9.7%

-3.0%

World bonds31

0.7%

6.2%

5.5%

3.3%

4.9%

Corporate bonds32

2.3%

19.3%

17.9%

11.0%

8.8%







Hedge fund indices






HFRI Fund Weighted Composite Index33

1.0%

-6.4%

-4.9%

8.0%

2.3%

HFRI Fund of Funds Composite Index33

-0.3%

-6.3%

-5.5%

3.6%

-0.7%

HFRX Global Hedge Fund Index

-0.5%

-9.3%

-8.9%

2.8%

-2.8%







Style indices






Barclay BTOP 50 Index

-2.3%

-2.1%

-4.1%

-1.0%

3.5%

HFRI Equity Hedge (Total) Index33

2.2%

-10.0%

-8.0%

8.2%

0.5%

HFRX Equity Hedge Index

-0.9%

-16.5%

-19.1%

-0.1%

-5.2%

HFRI Event-Driven (Total) Index33

2.3%

-5.9%

-2.7%

10.8%

2.6%

HFRX Event Driven Index

0.6%

-7.1%

-4.9%

4.2%

-1.6%

HFRI Macro (Total) Index33

-1.4%

-3.1%

-3.6%

2.8%

4.8%

HFRX Macro Index

-2.0%

-6.3%

-4.9%

-5.2%

-1.5%

HFRI Relative Value (Total) Index33

1.1%

-1.8%

0.5%

12.1%

4.7%

HFRX Relative Value Arbitrage Index

0.1%

-5.2%

-4.0%

12.7%

-1.1%

 

Source: Man database, Bloomberg and MSCI. There is no guarantee of trading performance and past or projected performance is not a reliable indicator of future performance. Returns may increase or decrease as a result of currency fluctuations.

 

1) Man AHL Diversified plc is valued weekly, but for comparative purposes the last weekly valuation of the month has been used.

2) AHL Alpha plc is valued weekly, but for comparative purposes the last weekly valuation of the month has been used.

3) Represented by Man AHL Diversity GBP DB. Please note that Man AHL Diversity GBP DB was valued weekly until 2 May 2011. Prior to this date, the last weekly valuation of the month has been used.                                      

4) Represented by Man AHL Trend EUR I. Please note that Man AHL Trend EUR I was valued weekly until 2 May 2011. Prior to this date, the last weekly valuation of the month has been used.

5) Represented by GLG European Long Short Fund - Class D Restricted to Unrestricted (29/06/2007) - EUR.

6) Represented by GLG European Equity Alternative IN EUR. Please note that the inception date of GLG European Equity Alternative IN EUR is 26 July 2011.

7) Represented by GLG European Alpha Alternative IN EUR.

8) Represented by GLG European Opportunity Fund - Class D Restricted to Unrestricted (31/08/2007) - EUR.

9) Represented by MLIS European Opportunity Class B EUR ACC.

10) Represented by GLG North American Opportunity Fund - Class A Restricted to Unrestricted (29/06/2007) - USD.

11) Represented by GLG North American Equity Alternative IN USD. Please note that the inception date of GLG North American Equity Alternative IN USD is 24 January 2011.

12) Represented by GLG Alpha Select Fund - Class C - EUR.

13) Represented by GLG Alpha Select Alternative IN H EUR.

14) Represented by GLG Global Opportunity Fund - Class Z - USD.

15) Represented by GLG Global Convertible Fund - Class A - USD.

16) Represented by GLG Global Convertible UCITS Funds - Class A - USD.

17) Represented by GLG Market Neutral Fund - Class Z Restricted to Unrestricted (31/08/2007) - USD.          

18) Represented by GLG European Distressed Fund - Class A - USD.               

19) Represented by Ore Hill International Fund II Ltd.

20) Represented by GLG Emerging Markets Fund - Class A Restricted to Unrestricted (31/08/2007) - USD.     

21) Represented by GLG EM Diversified Alternative IN EUR.

22) Represented by GLG Atlas Macro Fund - Class A - USD.                                              

23) Represented by GLG Atlas Macro Alternative IN H GBP.                                                 

24) Represented by GLG Japan CoreAlpha Equity Fund - Class C to Class AAX (28/01/2010) - JPY.               

25) Represented by GLG Performance Fund Class A - USD.                                               

26) Represented by Man-IP 220 Ltd from 18 December 1996 to 31 December 2005 and Man-IP 220 Ltd - USD class bonds from 1 January 2006.

27) Represented by Man Absolute Return Strategies USD I.                                  

28) Represented by Man Dynamic Selection USD I.                                               

29) Represented by GLG Multi-Strategy Fund - Class A - USD Shares.

30) Represented by MSCI World Net Total Return Index hedged to USD.                                                              

31) Represented by Citigroup World Government Bond Index hedged to USD (total return).                                

32) Represented by Citigroup High Grade Corp Bond TR.                                                      

33) HFRI index performance over the past 4 months is subject to change.

 

*Please note that the December 2011 data is estimated.

 

Enquiries

 

Miriam McKay

Head of Investor Relations and Financial Communications

+44 20 7144 3809

miriam.mckay@man.com

 

David Waller

Head of Media Relations

+44 20 7144 2121

david.waller@man.com

 

Maitland PR

George Trefgarne

+44 20 7379 5151

 

About Man

Man is a world-leading alternative investment management business. It has expertise in a wide range of liquid investment styles including managed futures, equity, credit and convertibles, emerging markets, global macro and multi-manager, combined with powerful product structuring, distribution and client service capabilities. As at 31 December 2011, Man manages $58.4 billon.

 

The original business was founded in 1783. Today, Man Group plc is listed on the London Stock Exchange and is a member of the FTSE 100 Index with a market capitalisation of around £2 billion.

 

Man is a member of the Dow Jones Sustainability World Index and the FTSE4Good Index. Man also supports many awards, charities and initiatives around the world, including sponsorship of the Man Booker literary prizes and the Man Asian Literary Prize. Further information can be found at www.mangroupplc.com.

 

Forward looking statements and other important information

This document contains forward-looking statements with respect to the financial condition, results and business of Man Group plc. By their nature, forward looking statements involve risk and uncertainty and there may be subsequent variations to estimates. Man Group plc's actual future results may differ materially from the results expressed or implied in these forward-looking statements.

 

The content of the websites referred to in this announcement is not incorporated into and does not form part of this announcement.

 

Nothing in this announcement should be construed as or is intended to be a solicitation for or an offer to provide investment advisory services.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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